FTC Reports on Alcohol Marketing and Self-Regulation

A new Federal Trade Commission report on alcohol marketing and youth examines industry efforts to reduce the likelihood that alcohol advertising will target those under the legal drinking age of 21. It also announces a new system for monitoring alcohol industry compliance with self-regulatory programs. The report explains where alcohol suppliers spend their promotional dollars, provides data on compliance with the industry’s advertising placement standard, discusses the status of external review of advertising complaints, and provides information about the Commission’s education program to reduce teen access to alcohol.

This is the third FTC report on the status of alcohol industry self-regulation. The Commission’s first report in 1999 criticized the voluntary guidelines, which at times permitted alcohol ads to appear in media for which up to half the audience consisted of children and youth, and for failing to provide for third-party consideration of complaints about compliance with the guidelines. The FTC’s 2003 report announced that the alcohol industry had agreed to obtain audience data before placing ads, and required that at least 70 percent of the audience for print, radio, and television ads consist of adults over 21. Noting that one industry group had adopted third-party review of advertising, the report continued to urge the remaining two groups to follow suit.

The new report, based on data provided by 12 major alcohol suppliers in response to FTC orders, is the first to present detailed information about how alcohol companies allocate their promotional dollars. It finds that about 42 percent of such expenditures are used for traditional television, radio, print, and outdoor advertising; about 40 percent are used to help wholesalers and retailers promote alcohol; about 16 percent are used for sponsorships; and two percent are directed to other efforts, such as Internet and digital advertising.

With regard to advertising placement, the FTC found that more than 92 percent of radio, television, and print ads disseminated by the 12 suppliers met the 70 percent standard. Because placements that missed the target were concentrated in smaller media, more than 97 percent of total alcohol advertising “impressions” (individual exposures to advertising) met the 70 percent standard. The report also notes that all three segments of the alcohol industry have now adopted systems for third-party review of advertising complaints.

In addition, the report provides an update on the FTC’s “We Don’t Serve Teens” alcohol consumer education program. Supported by a broad base of public and private organizations, including federal and state organizations, the alcohol and advertising industries, and consumer groups, “We Don’t Serve Teens” provides information about the importance of restricting underage access to alcohol. In 2007, “We Don’t Serve Teens” public service announcements (PSAs) generated more than 1.1 billion advertising impressions, with a market value of over $9 million.

The report recommends that the industry adopt the 70 percent standard for event sponsorships, and that self-regulatory review boards accept complaints from competitors and anonymous complainants. It also found that a 70 percent placement standard has now been adopted for Internet advertising, at the agency’s request. Finally, it announces a new monitoring system to help the agency assess the industry’s efforts on an ongoing basis. Each year, the Commission will issue orders requiring two to four suppliers to provide information about advertising and marketing practices and compliance with self-regulatory guidelines.

The Commission vote to approve the Report on Alcohol Marketing and Advertising was 4-0. Commissioner Pamela Jones Harbour issued a separate statement concurring in part and dissenting in part. This statement can be found as a link to this press release on the FTC’s Web site.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

FTC Approves Final Consent Order in Matter of Missouri State Board of Embalmers and Funeral Directors

For Your Information

Commission approval of final consent order – Following a public comment period, the FTC has approved the issuance of a final consent order in the matter concerning the Missouri Board of Embalmers and Funeral Directors, as well as a letter responding to the commenter of record. The Commission vote approving the final order was 4-0. (FTC File No. 061-0026; the staff contact is Joel Christie, Bureau of Competition, 202-326-3297; see press release dated March 10, 2008.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

(FYI 32.2008.wpd)

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FTC Approves Final Consent Order in Matter of Missouri State Board of Embalmers and Funeral Directors

For Your Information

Commission approval of final consent order – Following a public comment period, the FTC has approved the issuance of a final consent order in the matter concerning the Missouri Board of Embalmers and Funeral Directors, as well as a letter responding to the commenter of record. The Commission vote approving the final order was 4-0. (FTC File No. 061-0026; the staff contact is Joel Christie, Bureau of Competition, 202-326-3297; see press release dated March 10, 2008.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

(FYI 32.2008.wpd)

Contact Information

MEDIA CONTACT:
Office of Public Affairs
202-326-2180

Payday Loan Lead Generators Settle FTC Charges

Two payday loan lead generators have agreed to settle Federal Trade Commission charges that their Internet advertising stated payday loan costs and repayment periods without disclosing annual percentage rate (APR) information as federal law requires. The settlements require the respondents to disclose APR information in similar payday loan ads in the future and to comply in all other respects with the Truth in Lending Act (TILA) and its implementing Regulation Z. APR information helps consumers compare the costs of these payday loans with others and with alternative forms of short-term credit.

In typical payday loan transactions, consumers receive cash in exchange for their personal checks or authorization to debit their bank accounts, and lenders and consumers agree that consumers’ checks will not be cashed or their accounts debited until a designated future date. Payday loans have high fees and short repayment periods, which translate to high annual rates, and they often are due on the borrower’s next payday, usually about every two weeks. For more information about payday loans, see the FTC’s consumer education publication, “Payday Loans = Costly Cash,” available at http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt060.shtm.

The respondents, We Give Loans, Inc. and Aliyah Associates, LLC, d/b/a American Advance, are lead generators based in Minnesota and Arizona, respectively. They advertise payday loans on their Web sites and collect information from consumers through their online applications. The respondents then sell this “lead” information to lenders that ultimately offer payday loans to consumers.

The TILA and Regulation Z require that those who advertise the cost of credit must disclose the APR of the loans to help consumers make better-informed decisions, including assisting them in comparison shopping among loans. According to the FTC’s complaints, the respondents stated loan costs on their Web sites – a $20 fee for a $100 loan, for example – but failed to disclose the APR. For a typical 14-day pay period, consumers who obtained payday loans advertised by We Give Loans, Inc. would pay an APR from 260 percent to 521 percent or higher, and consumers who obtained payday loans advertised by Aliyah Associates would pay an APR of 782 percent.

The proposed consent orders prohibit the respondents from advertising certain credit offers without providing consumers with key disclosures, such as the APR, and bar them from violating the TILA and Regulation Z in any other manner.

The Commission voted 4-0 to accept the administrative complaints and consent orders.

The FTC will publish an announcement regarding the agreements in the Federal Register soon. The agreement will be subject to public comment for 30 days, until July 24, 2008, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, Room H-135 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC requests that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments that do not contain any nonpublic information may instead be filed in electronic form by following the instructions on the web-based form at http://secure.commentworks.com/ftc-WeGiveLoans and/or http://secure.commentworks.com/ftc-Aliyah.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. These complaints are not a finding or ruling that the respondents have actually violated the law. The consent agreements are for settlement purposes only and do not constitute admissions by the respondents of a law violation.

Copies of the complaints, consent orders, and analyses to aid public comment are available from the FTC’s Web site at http://www.ftc.gov and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(FTC File Nos. 0723205, 0723206)
(We Give Loans)

Payday Loan Lead Generators Settle FTC Charges

Two payday loan lead generators have agreed to settle Federal Trade Commission charges that their Internet advertising stated payday loan costs and repayment periods without disclosing annual percentage rate (APR) information as federal law requires. The settlements require the respondents to disclose APR information in similar payday loan ads in the future and to comply in all other respects with the Truth in Lending Act (TILA) and its implementing Regulation Z. APR information helps consumers compare the costs of these payday loans with others and with alternative forms of short-term credit.

In typical payday loan transactions, consumers receive cash in exchange for their personal checks or authorization to debit their bank accounts, and lenders and consumers agree that consumers’ checks will not be cashed or their accounts debited until a designated future date. Payday loans have high fees and short repayment periods, which translate to high annual rates, and they often are due on the borrower’s next payday, usually about every two weeks. For more information about payday loans, see the FTC’s consumer education publication, “Payday Loans = Costly Cash,” available at http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt060.shtm.

The respondents, We Give Loans, Inc. and Aliyah Associates, LLC, d/b/a American Advance, are lead generators based in Minnesota and Arizona, respectively. They advertise payday loans on their Web sites and collect information from consumers through their online applications. The respondents then sell this “lead” information to lenders that ultimately offer payday loans to consumers.

The TILA and Regulation Z require that those who advertise the cost of credit must disclose the APR of the loans to help consumers make better-informed decisions, including assisting them in comparison shopping among loans. According to the FTC’s complaints, the respondents stated loan costs on their Web sites – a $20 fee for a $100 loan, for example – but failed to disclose the APR. For a typical 14-day pay period, consumers who obtained payday loans advertised by We Give Loans, Inc. would pay an APR from 260 percent to 521 percent or higher, and consumers who obtained payday loans advertised by Aliyah Associates would pay an APR of 782 percent.

The proposed consent orders prohibit the respondents from advertising certain credit offers without providing consumers with key disclosures, such as the APR, and bar them from violating the TILA and Regulation Z in any other manner.

The Commission voted 4-0 to accept the administrative complaints and consent orders.

The FTC will publish an announcement regarding the agreements in the Federal Register soon. The agreement will be subject to public comment for 30 days, until July 24, 2008, after which the Commission will decide whether to make it final. Comments should be addressed to the FTC, Office of the Secretary, Room H-135 (Annex D), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The FTC requests that any comment filed in paper form near the end of the public comment period be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments that do not contain any nonpublic information may instead be filed in electronic form by following the instructions on the web-based form at http://secure.commentworks.com/ftc-WeGiveLoans and/or http://secure.commentworks.com/ftc-Aliyah.

NOTE: The Commission issues an administrative complaint when it has “reason to believe” that the law has been or is being violated, and it appears to the Commission that a proceeding is in the public interest. These complaints are not a finding or ruling that the respondents have actually violated the law. The consent agreements are for settlement purposes only and do not constitute admissions by the respondents of a law violation.

Copies of the complaints, consent orders, and analyses to aid public comment are available from the FTC’s Web site at http://www.ftc.gov and the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(FTC File Nos. 0723205, 0723206)
(We Give Loans)

FTC Warns Against Sweepstakes Scammers Posing as Government Officials

Putting a new twist on an old scam, con artists are posing as government officials when they tell consumers they have won a sweepstakes prize. Crooks also take advantage of Internet technology, which can make it appear that they are calling from Washington, DC, or the consumer’s hometown while they tell consumers they represent the Federal Trade Commission or some other government agency.

To learn more about how to avoid this type of scam, go to http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt167.shtm.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(FYI govt officials)

FTC Warns Against Sweepstakes Scammers Posing as Government Officials

Putting a new twist on an old scam, con artists are posing as government officials when they tell consumers they have won a sweepstakes prize. Crooks also take advantage of Internet technology, which can make it appear that they are calling from Washington, DC, or the consumer’s hometown while they tell consumers they represent the Federal Trade Commission or some other government agency.

To learn more about how to avoid this type of scam, go to http://www.ftc.gov/bcp/edu/pubs/consumer/alerts/alt167.shtm.

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC’s online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 1,500 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s Web site provides free information on a variety of consumer topics.

(FYI govt officials)

Commission Approves Filing of Joint Amicus Brief in Matter of Altria v. Good, et al.; FTC Seeks Public Comment on DVD Rating Study

Commission approval of joint amicus brief filing – The Commission has approved the filing of an amicus brief with the U.S. Supreme Court in the matter of Altria v. Good et al., No. 07-562 (U.S. S. Ct.). The brief, which was filed on June 18, 2008 jointly with the U.S. Department of Justice’s Office of the Solicitor General, can be found on the FTC’s Web site as a link to this press release. The case concerns whether state law claims brought by a consumer against a cigarette company have been expressly preempted by the Federal Cigarette Labeling and Advertising Act (FCLAA), 15 U.S.C. sec. 1331, et seq., or in an implied manner by the FTC. The Commission vote approving filing of the amicus brief was 4-0. (FTC File No. P082105; the staff contact is David C. Shonka, Office of the General Counsel, 202-326-2436.)

Commission issuance of Federal Register notice seeking public comment – The FTC is seeking public comment on a proposal to conduct consumer research on parental use of the Motion Picture Association of America’s movie rating system on rated DVDs, and on parental attitudes toward the marketing of unrated DVD versions of rated motion pictures. Comments should refer to “DVD Rating Symbol Study: FTC Matter P994511″ and be sent or delivered to: Federal Trade Commission, Office of the Secretary, Room H-135 (Annex J) 600 Pennsylvania Ave, N.W., Washington, DC 20580. The Commission is requesting that any comment filed in paper form be sent by courier or overnight service, if possible because U.S. postal mail in the Washington area and at the agency is subject to delay due to heightened security precautions. Moreover, because paper mail in the Washington area and at the agency is subject to delay, please consider submitting your comments in electronic form.

Comments filed electronically should be submitted by following the instructions on the Web-based form at https://secure.commentworks.com/ftc-DVDRatingStudy. To ensure that the Commission considers an electronic comment, you must file it on the web-based form at the https://secure.commentworks.com/ftc-DVDRatingStudy Web link.

If this notice appears at www.regulations.gov, electronic comments also may be filed through that Web site. The Commission will consider all comments that regulations.gov forwards to it. Comments can be submitted until August 4, 2008. A Federal Register notice announcing the research can be found at: http://frwebgate.access.gpo.gov/cgi-bin/getpage.cgi?dbname=2008_register&position=all&page=32026.

The Commission vote approving issuance of the notice was 4-0. (FTC File No. P994511; the staff contact is Michelle Rusk, Bureau of Consumer Protection, 202-326-3148)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

(FYI 31.2008.wpd)

FTC Submits Staff Comment to FAA on Proposed Congestion Management Rule for LaGuardia Airport

For Your Information

The Federal Trade Commission has approved a staff comment to the Federal Aviation Administration (FAA) on a proposed congestion management rule for LaGuardia Airport.

As part of a proposal to alleviate congestion on LaGuardia’s runways, the FAA has proposed auctioning a limited number of landing and take-off slots for a 10-year ownership period. The comment prepared by staff of the FTC’s Bureau of Economics supports the FAA’s effort, finding the measured introduction of an auction a reasonable approach to improving the current efficiency of slot allocation. In the comment, staff also explains that it is important to consider carefully the design of any auction mechanism, noting that it should be tailored to the specific features of the industry and publicly vetted. Staff also urges the FAA to consider congestion pricing as an additional option to improve the current allocation of landing and take-off slots.

The FTC vote approving the staff comment was 4-0. (FTC File No. V080015. The staff contact is Gregory Luib, Office of Policy Planning, 202-326-3249.)

Copies of the staff comment can be found as a link to this press release on the Commission’s Web site.

(FYI LaGuardia)

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MEDIA CONTACT:
Office of Public Affairs
202-326-2180

FTC Submits Staff Comment to FAA on Proposed Congestion Management Rule for LaGuardia Airport

For Your Information

The Federal Trade Commission has approved a staff comment to the Federal Aviation Administration (FAA) on a proposed congestion management rule for LaGuardia Airport.

As part of a proposal to alleviate congestion on LaGuardia’s runways, the FAA has proposed auctioning a limited number of landing and take-off slots for a 10-year ownership period. The comment prepared by staff of the FTC’s Bureau of Economics supports the FAA’s effort, finding the measured introduction of an auction a reasonable approach to improving the current efficiency of slot allocation. In the comment, staff also explains that it is important to consider carefully the design of any auction mechanism, noting that it should be tailored to the specific features of the industry and publicly vetted. Staff also urges the FAA to consider congestion pricing as an additional option to improve the current allocation of landing and take-off slots.

The FTC vote approving the staff comment was 4-0. (FTC File No. V080015. The staff contact is Gregory Luib, Office of Policy Planning, 202-326-3249.)

Copies of the staff comment can be found as a link to this press release on the Commission’s Web site.

(FYI LaGuardia)

Contact Information

MEDIA CONTACT:
Office of Public Affairs
202-326-2180